Hedge fund or money management firm

S

sectrader

Hello,
I want to move beyond just trading my own account. I am doing it for 3.5 years. 1st year - 150%, 2nd - 50%, 3rd year - let's say about 30% .
Ideally - want to start hedge fund. Problems I can't solve:
I live in California. If I start money management I need to register with California. If I register with California - I can't take performance fee from non-qualified investors. So, I don't see how I can start hedge fund. I have 1 qualified investor I know and his starting investment will cover 10% or so from hedge fund startup expenses. If I were permitted to get up to 35 non-qualified investors - I would start since I can get some non-qualified friend and family to invest with my fund.
Since I trade mostly stocks - CTA does not work for me.
OK, may be I can do regular money management without performance fee - I know, I think, a lot about investments.
Clients open accounts in Interactive Brokers or other brokerage - I get power of Attorney and ask for 1 percent or about management fee. In this case I will use all my knowledge and experience, except primary system - I trade non-liquid staff for my main system. My problem in this case - I don't know how to start money management firm.
I found some books, advice, web site for financial planners - but financial planners send clients to money managers. I would prefer to be money manager myself. I've ordered books how to start financial planning business - but it does not look like it makes sense for me to go exactly to this route.
Going to work to brokerage firm does not make sense either - I am making more than starting brokerage firm employee.
I would appreciate any advice about hedge fund startup or how to start money management firm.
Thank you.
 
Another idea, start a LLC corporation and make all your investors partners. Just an idea, probably not allowed though.

http://www.turnkeyhedgefunds.com/faq.htm

Or

Under Regulation D, a hedge fund can accept up to 35 non-accredited investors. However, Rule 502(B) requires that hedge funds offered to non-accredited investors have certain adequate financial statements. - not sure if the new registration rule makes this obsolete

There are some managers who do ok for themselves charging only a 2% management fee to investors out of state, and the managed money in their home state has a 500k minimum.
 
ib fa account is perfect for this. you dont take control of the money so you are exempt from most regulations up to 15 clients.

Quote from sectrader:

Hello,
I want to move beyond just trading my own account. I am doing it for 3.5 years. 1st year - 150%, 2nd - 50%, 3rd year - let's say about 30% .
Ideally - want to start hedge fund. Problems I can't solve:
I live in California. If I start money management I need to register with California. If I register with California - I can't take performance fee from non-qualified investors. So, I don't see how I can start hedge fund. I have 1 qualified investor I know and his starting investment will cover 10% or so from hedge fund startup expenses. If I were permitted to get up to 35 non-qualified investors - I would start since I can get some non-qualified friend and family to invest with my fund.
Since I trade mostly stocks - CTA does not work for me.
OK, may be I can do regular money management without performance fee - I know, I think, a lot about investments.
Clients open accounts in Interactive Brokers or other brokerage - I get power of Attorney and ask for 1 percent or about management fee. In this case I will use all my knowledge and experience, except primary system - I trade non-liquid staff for my main system. My problem in this case - I don't know how to start money management firm.
I found some books, advice, web site for financial planners - but financial planners send clients to money managers. I would prefer to be money manager myself. I've ordered books how to start financial planning business - but it does not look like it makes sense for me to go exactly to this route.
Going to work to brokerage firm does not make sense either - I am making more than starting brokerage firm employee.
I would appreciate any advice about hedge fund startup or how to start money management firm.
Thank you.
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